The economic crime and corporate transparency bill is designed to tackle the activity of using assets, money or finance to obtain a profit through unlawful methods and using data for fraudulent purposes. The bill will include regulations which will affect all types of corporate entities including Limited companies, Limited partnerships and the registration of overseas entities. This will include changes to the requirements for registering and maintaining companies in the UK.
When the bill has been passed by UK parliament and takes effect Companies House will undergo the biggest transformation since 1844. In a bid to prevent economic crime and increase the transparency of the public register any individuals who apply to set up a new company will have to provide proof of their identity before registering their business. The new regulations introduced will also apply to existing companies and all individuals who are involved in the running, ownership and controlling of companies will be required to provide proof of identity.
While Companies House has not provided information to confirm how this information will be collected and what additional verification checks will be completed it is likely Companies House will use one of the existing online verification systems that are currently used by other government organisations.
With more personal details required for individuals who are involved with the running of UK businesses, there is an understandable concern about this being available to the general public in the interest of transparency and the possibility of this being used for fraudulent purposes. Companies House have stated individuals will be able to protect information which is published on the public database if this puts the individual at risk of fraud or other harm.
Historically UK limited partnerships (LP) have been a common business entity that has been misused due to the lack of transparency and filing requirements to register and maintain the business. New regulations will be introduced to tighten the registration requirements and provide greater transparency. Companies House have also outlined the plan to officially deregister Limited Partnerships in line with regulations for limited companies.
The Economic Crime and Corporate Transparency Bill outlined by the government will be introduced in the hope of making Companies House one of the most trusted and open business registers in the world. As the bill is processed through parliament it is likely further details will emerge and will provide greater guidance for UK companies. We will publish further information as this becomes available.